Pay for performance penalties fail again

The Incidental Economist astutely deconstructs the assumptions leading to the failure of the nationwide Hospital-Based Purchasing Program’s pay-for-performance penalties to reduce 30-day mortality. These assumptions include:

30-day mortality is the right outcome measure because it is feasible to measure

30-day mortality is a valid proxy for the quality of inpatient care delivered.

As shown with readmissions based penalties and with other pay for performance penalties, many of the determinants of outcomes such as mortality and readmissions lie outside of the control of the hospital, including factors such as the patient’s educational attainment, income and access to care.

Until we apply more evidence-based science to selection of our pay-for-performance metrics, they will continue to fail to achieve their intended goals, and will, instead, penalize hospitals for the patient populations they serve.